I had the pleasure of returning to Toronto to present at the Mobile Media Week last week, where I did a pair of keynotes, to the Mobile Think Tank, and the Mobile Biz Bootcamp. In the bootcamp they had one of the focus areas on mobile commerce and we heard from many retailers what they are up to in the mobile space.
So this blog is not about mobile banking or mobile credit cards. It is not about 'all' mobile commerce, ie any digital goods sold directly to a phone do not really involve (or need to involve) bricks-and-mortar type of retail. So our music, movies, videogames, airline tickets, insurance etc do not require a separate visit to a retail establishment, because the service (or proof of purchase of service) intended (music, movie, game, air ticket, insurance etc) can be delivered completely to our phone.
That is only a minority of our retail. What of the locksmith, the hairdresser, the dentist office, the florist, the clothing retailer, supermarket and drug store - the typical 'high street' or 'mainstreet' shopping experience in any small town on the planet. What of them? If you need your locks changed, that cannot be done 'remotely' via a mobile phone or the PC. Or your haircut? Can't be done directly via mobile. Mobile can show you what your new haircut might look like, virtually, but the actual hair still needs to be cut with actual scissors by an actual hairdresser or barber. That can't be fulfilled via mobile. So lets look at the real bricks-and-mortar retail establishments. What is the role of mobile to them?
Its three-fold. There is 'marketing communication' (ie advertising) we can deliver to our customers before they come to our store - and use mobile also to 'drive foot-fall' ie drive actual human visitors to our stores. This is very important in an era when e-tailers like Amazon and Expedia and Ebay are expanding their product offerings and trying to sell everything online (and increasingly also on mobile). If you own prime retail space in the main shopping district in your town, you want your customers to keep coming to your stores and make purchases there. Mobile is a new way to help drive visitors to your store.
Then there is the experience within the store. As the retailers get to know mobile, they notice it is a very powerful activation tool for customers already inside their store, to help them try something, go to a different part of the store, and to engage with the customer, assisting with the shopping experience - all this while of course hoping to sell them more stuff, and differentiating the shopping experience from that inside other shops today. In a very small shop - imagine a typical jeweller for example - there isn't much movement inside a store, but then consider the megastores by retail giants - you can literally get lost inside a super-duper-store..
The third experience is after the shopping experience. The mobile goes everywhere, where our shopper goes with the newly bought goods. Even if your customer bought condoms for having sex, yes, that weird statistic from earlier this year, that 10% of British youth think its ok to send SMS text messages while having sex.. So yes, the mobile will follow your customer to wherever they go, including the bathroom and the bed.. So every loyalty program should start with mobile: a mobile is carried even when the wallet is not.
Lets take concrete examples. The examples of the first kind are most common, because that is usually where most mobile marketing will know to start. Its the 'obvious' bit. I have spoken a lot about some early pioneers in this space, like the Guinness beer Java app for the Rugby Sevens tournament here in Hong Kong which offered clever utilities to the international tourists who had travelled to Hong Kong for the big international rugby tournament. So it offered the rugby scores and stats and team rosters and biographies of the star players and all what you'd expect from a sports news service. Then it offered the typical tourist guide advice, the maps to Hong Kong, where is your hotel, where is the nearest MTR subway train station, etc. It was very innovative in pre-installing a series of links to short phrases said in Cantonese, so the English-speaking tourist could just click on a link on the phone, and the phone would 'speak' in Cantonese, telling the driver where to go, or asking the bartender to order a pint of Guinness beer etc. All makes sense.
So far we have the elements of any good sporting/travel related mobile web service. The whole thing was delivered via a Java app, so it works on 80% of all the phones on the planet (where an iPhone app would only work on 2% of all of the mobile phones in use, Android even less today). Then the clever bit about retail. You wanted the Guinness app to drive 'foot-fall' and to pubs that sell Guinness of course? And yes, it of course had included Guinness-serving bars listed on the maps it showed and helped tourists find the nearest pint of Guinness in Hong Kong.
How successful was it? Sean Rach of Ogilvy reported in Singapore earlier this year, that the Sevens Tournament Guinness app in Hong Kong had boosted Guinness sales by 25%. That is good use of mobile to drive retail sales.
In Toronto we heard for example from Chris Borek who runs the mobile initiatives for US retail giant Target stores. They have of course the mobile service that allows consumers to find out which of their Target stores has a given item in stock, and how many of those items are in that particular store, etc. This is all pretty 'obvious' to retail chains to consider when they start to deploy mobile marketing to their consumers.
I have countless such stories that I have collected into my 'Pearls' (and have many in my ebook as a collection of advertising related pearls in ebook Pearls Vol 1: Mobile Advertising). Mobile is used to drive retail visitors to stores from the Puma adver-game in China, to Victoria's Secret when they opened their new store in Chicago, to Borders bookstore, which reported 23% response rates to their personalized book offer coupons delivered via mobile. Perhaps the best known campaign is BMW's winter tyres campaign two years ago, which achieved a 30% conversion rate - measured actual purchases, driven by a simple personalized MMS campaign. And the world record as far as we know, is still the Gillette razor campaign in South Korea - where 98% of the mobile coupons were redeemed. Imagine that, a 98% conversion rate for a mobile coupon campaign.
Where e-tailers are direct rivals to the traditional bricks-and-mortar store, mobile is a friend to the traditional store-keepers. Mobile helps you bring visitors to your store. But it can be far more than that. However, before I go further, I have to make one obvious point.
MUST BE OPT-IN
Mobile can drive visitors to your store. But please don't think of the idea of the Tom Cruise movie 'Minority Report' and its style of personalized spam ads delivered by location. That idea of location-based ads delivered to random walkers-by is a myth, it is economically not viable and it is hated by consumers. Do not bother to spend one minute planning any location-based spam ad campaigns. If you're lucky you might get a tiny percentage of success but nothing like these award-winning campaigns I mention in this blog.
All of the above campaigns that I mentioned were on the basis of opt-in. You have to build your mobile marketing target database by opt-in basis. That is a slow process and you have to start now. But it can be incredibly powerful. Consider Japan. Today, out of the total Japanese population, one in 8 Japanese citizens has already signed up to receive coupons from McDonalds! Why would McDonald's ever bother to waste the money on advertising on TV or magazines or movies or radio - all of which are media where the majority of the message goes to consumers who are NOT customers of yours. When McDonalds can now reach the actual pockets of their actual consumers who not only use their products, but like McD enough to accept their offers and coupons and marketing, onto their mobile phones. Please do remember, Japan is a fish-eating nation (sushi bars are the real fast food of Japan) so 1 in 8 in Japan is an awesome achievement for McDonalds.
The clever part comes to allow customers to engage with you when they are in-store. This is still in the early stages. But mobile should be used to move the customers around the store, to bring them to try new things you sell, and of course to offer them instant coupons and discounts and offers. Here we have the power of various non-cellular technologies we can use, such as Bluetooth and near field and even WiFi. We can also create further engagement of our current customer in our current store. I heard two great innovative examples this summer. In Singapore I heard of the Adidas store promotion, which was the world's first use of Augmented Reality 'in the first person' - when they introduced the digital mirror that allowed instant fittings of t-shirts with the help of a simple cameraphone and their clever use of the digital mirror. I blogged about it earlier so if you don't know the example, please take a look here (Adidas introduces first person AR)
Even more powerful is the idea from Tesco that I just heard three weeks ago when in Brazil, speaking at the Mobile Marketing Forum run by the Mobile Marketing Association in Sao Paulo. Tesco the UK's biggest supermarket chain, is now offering its intelligent shopping list service. The logic of using the mobile phone as your shopping list is pretty obvious for most consumers. The phone is always with us, so we can easily see what needs to go to the shopping list. If we integrate that with our Tesco's shopping experience, Tesco can offer to add items from our previous shopping visits directly to the shopping list - and using 2D barcodes (QR codes) they can make it really easy at one click to add new items to the shopping list while in the store, etc.
That all is 'to be expected'. A shopping list is very 'unsexy' and of little interest. Until we get to the magical part. Tesco's will ask you which Tesco store you want to visit, and then Tesco will automatically re-arrange the shopping list, in the order of the items in the shopping aisles - of that particular Tesco Store! Awesome! It is 'magical'. It is like Tesco and our mobile phone is reading our mind. Even as the stores will periodically re-arrange the stores completely (and confuse us shoppers..) - this app knows what was re-arranged and still intelligently routes us inside the store. And if we go to an unfamiliar Tesco store today - like the new one at the mall that just opened, all we need to say to the app is which store we want to go, and the shopping list is re-arranged based on the aisles of that store. Awesome!
Now, the really clever bit is of course under the skin. Its not that we help Tomi Ahonen do his shopping. Tesco's would know from my purchase pattern that Tomi clearly prefers Pepsi to Coca Cola. Well, if Tomi is using the Tesco shopping list app on the phone, next we will have Tesco selling incredibly powerful info to Coca Cola. Did you know Coca Cola, that a regular Pepsi drinker is now in Aisle 4 of Tesco store number 107, and on the next Aisle (Aisle 5) there are the soft drinks? Would you like to send a Coca Cola offer to this Pepsi drinker? We can actually identify the point of when a purchase decision is being made
Now, how important is opt in and personalization in this case? Tesco's has to have asked me permission to send marketing to me. And I will have had to have selected soft drinks as one of the categories for which I say yes. But yes, as I walk on the aisle, and I approach the soft drinks, and I am looking at my phone (as I am reading the Tesco shopping list)! - I receive an instant coupon for 2 bottles for price of 1 from Coca Cola... Or perhaps Coca Cola sends me a trial offer of one of their new flavors like cherry coke, vanilla coke or whatever new they now have..
Note, Tesco will not reveal my name to Coca Cola. Tesco will not sell my phone number to Coca Cola. Tesco will not violate my identity in any way. If I said no to soft drink ads, Tesco will not even bother to tell Coca Cola. But if Tomi Ahonen said yes to soft drink ads, then Tesco can tell Coke that there is 'a Pepsi buyer' in that very specific store. And it will be Tesco, not Coca Cola, who will deliver the ad to me. I have not given Coke permission to market to me. But I will appreciate Tesco trying to find me good bargains in areas that I am interested in..
But very VERY importantly, Tesco know me well from my past purchase patterns. They know what TYPE of product of Pepsi I buy. I am buying regular fully caffeinated Pepsi, not sugarfree Pepsi Max, so Coca Cola can equally target me very accurately with their corresponding product(s). Because Tesco knows this, they can help Coca Cola give me the best possible offer - don't sell me Diet Coke haha, this customer doesn't buy any diet sodas, ever!
Tesco also know what format I buy. I don't buy the 2 liter or 3 liter bottles, I buy several of the small bottles. So again, if Coca Cola tried to sell me a 2 liter bottle of Coke, it would be a waste simply because I never buy any soda at that size (I live alone, that amount of soft drink would go stale long before I had finished the bottle). Tesco can help optimize and target the ad for its retail brands and also deliver for its customers the best value.
Think about it. If you don't have a strong brand preference one way or the other, and you got served discount coupons instantly while in the store, of only those goods that you buy anyway - I would never be offered baby diaper offers for example, as I do not have kids. And I use an electric razor, so I wouldn't get any offers of Gillette razors etc. Only the stuff I really buy, in the categories I buy. Totally relevant offers to me...
This is still only the beginning. We can do games in the stores, have customers collect points for visiting a specific department or desk, or viewing a particular promotion or engaging with an automated digital marketing gadget like some touch screen promotional panel for example. Give our customers some loyalty points or chances to win some trinkets and soon they cannot imagine shopping without having the phone in their hands all the time. And remember - get their permission to promote to them - and don't abuse that permission.
The part least understood so far, is the after-store experience. Retailers do not quite understand this part - that the mobile phone is upon our person - even after our wallet is not there anymore - we take our phones to the bathroom, we sleep with the phone in bed with us, and most amazingly, we keep the ringer on, while in bed. So mobile can even reach us in our sleep. No other mass medium has ever had such a total reach.
What can we do with this? Its the obvious channel to use for customer feedback. In Singapore today all three mobile operators do this with the visits to their stores. If you visit the mobile operator (carrier) store, after you leave you will receive an SMS message asking you if you were satisfied with your visit to the store. You can respond by simple SMS saying yes or no. That message obviously is not charged to your phone bill. And what if you say you were not satisfied.
Mobile telecoms competition in Singapore is already so mature and customer-oriented, all stores do this - if you say no, you will receive a call from headquarters, from a senior exec in sales, who will talk to you personally to find out what happened. And obviously that senior sales exec will be calling next the store manager of where you visited and that store manager will go have a talk with the sales clerk who may be having a bad day today, or perhaps did not pay attention to the training, or who - perhaps, if this pattern holds - is not really suited for a customer service job like retail. Imagine how powerful management tool this is, if you let customers talk directly to sales management...
This is the newest and most difficult part of the use of mobile in retail, so its rather easy to see that its the mobile operators/carriers who are first to adopt this. But it can also be simple other things like loyalty points, like follow-up communications, like updates, accessories, etc. Since we know what you bought, we can follow up.
In the USA, Rite Aid the pharmacist retail chain is now letting its loyalty card holders register their cellphone number to the loyalty card. Then the customer does not need to carry the Rite Aid printed loyalty card anymore, but only give the phone number at the cash register, to collect the loyalty points. Clever. But what does Rite Aid do with these customers? As it sells prescription drugs for example, it can send alerts when a given prescription is about to run out, a few days before, and remind the customer to go get a doctor's authorization to renew the prescription before it runs out, etc. This kind of 'after-care' is what mobile is by far the best tool to use.
Finnish libraries do that, by sending reminders to the library users two days before a book is due back, to remember to bring it back, and allowing the user to re-new the book loan via SMS (as long as the book is not ordered by another library patron). Isn't that cool. Renew your book by SMS, rather than lugging the books back to the library to be stamped...
There are some other clever bits to retail use of mobile that I want to mention. One magical opportunity obviously is AR, Augmented Reality. But AR is currently mostly limited to smartphones, so your AR solution is one to deply at a later stage, when the basics have been covered. But consider this for magic. Ikea has an AR app for some smartphones, that allows you to select any items from the Ikea catalog, and 'virtually test' them in your home. To use the cameraphone view, to look at your own living room, then super-impose that new Ikea sofa onto the view, and see if the sofa brown color matches your curtains and goes with the coffee table you have, etc... That kind of thing. Magical.
Viral is another thing we should all be thinking of every time we are in anything with mobile. The Puma racing advergame I mentioned earlier, had this element. You get a chance to win Puma rewards if you are a good racer, yes, against other racers. But you also win Puma rewards if you are active in spreading the game to others. I love this idea. I just was in Athens this week at a customer event by internetq for several operator customers of internetq, where I was presenting about mobile marketing and advertising. And one of the examples I told was that of Orange Poland, who had this kind of incentive in their game (the daily prize was a BMW car, and they were promoting their new Club Orange). All those who were active in spreading the news about the game were also rewarded with points, which increased the chances of winning in the game. In all, the campaign was so successful that 1.5 million people participated - 13% of Orange Poland's total customer base. This is the kind of uses we need in all mobile campaigns. As Rudy de Waele likes to say, Think Global, Act Viral. Or how Fjord CEO Mike Beeston says, make all mobile services 'sufficiently contageous'. Viral is a very powerful element of mobile, we need to learn to use it well.
I just heard in Athens at that internetq event from Mike Walsh about fashion shows in Tokyo now, where as the models walk by, you can point your phone at the supermodel, and pick the item of clothing they are wearing, and order it on the spot, in your size, in the color of your choice, etc. Instant shopping. Cool, kawaii, as the Japanese would say. This is a sign of the things to come in the near future for all for us.
And back to foot-fall. We know that the mobile is unique to each person, so personal, we don't even share it with our spouces. So when phone number 123-456-7890 walks into your store, it is certainly the same person with that phone number as visited your store two weeks ago or a year ago. Certainly. So we can do great things with that information.
We need to have the customer tell us they're in the store now. The Rite Aid loyalty card or Tesco Loyalty card is one way. We can do many other things - why not create a game where you can register via a 2D barcode or QR code which is only inside the store. Each of our stores has a different code, when you visit, you have a chance to win, but give a chance to win something in that store for all who visited that specific store, then give a grand prize where odds increase for all who visit many stores... Make it a game to try to get your customers to visit as many of your stores as possible..
ENGAGE THROUGH WINDOW DISPLAY
The last thought I want to leave you with today, is about when the store is closed. You pay a massive rent for that prime real estate on that specific street in your town, for your store. Most shops are not open 24 hours a day. If your store closes at some hour, and is on the street (ie not a shopping mall which itself also closes) - then there are people walking by your store after it is closed. Your expensive store space is 'idle' for what, 12 hours of every day? We can do better, with mobile.
You have your window display. It is designed to try to bring people into your store. It can be a very powerful sales person while you are closed. Why not make an interactive advertising game into your window display, to run automatically overnight, to collect phone numbers and permissions of passers-by to join the game. So if you are a jeweller, offer a chance to win a men's watch at the end of the month - in that window where you have men's jewelry, and the chance to win the corresponding women's watch in the window where you have womens' jewelry. Run a small video clip on a cheap DVD or flat screen PC monitor, just enough active, that anyone who is really watching the window, will be interested - but not a giant display so those who are not really interested (but want to enter every contest) would notice. A small portable DVD player is perfect for this, with a short 1 minute video on perpetual repeat. inviting passers-by to join the contest.
Then two critical parts - number 1 - make sure you give the passer-by the chance to double his chances if the customer visits the store itself, before now and the date the prize is awarded. You want the visitors to come into the store and fill out a short survey (by mobile or on a touch screen simple interface at the store like an iPad for example). And of course, the prize has to be picked up in person, inside the store.
Every single store with a store-front at any street in any town should have a simple interactive tool to engage with passers-by for after-hours. No matter what you sell or offer, give the passers-by a chance to win something nice. Make it something different every month, don't run the same promotion in any way inside the store - you don't want to give away stuff to regular customers, this is a away to connect with those who did not make it inside your store. Nothing stops your regular customers from playing in the game too - but they have to 'notice' the window ad (and most regular visitors won't be bothering to look at your window displays).
And as the customers register to your contest, ask them if they will allow you to promote to them via the phone. This is the process you should be doing at all times, everywhere. Keep asking permission to have your customer signed up to your opt-in database. Remember McDonald's in Japan. You have to do this continously over years, to get a big database of your actual customers. When you get the permission, make sure you offer only relevant ads - I am a man, don't offer me discounts on womens' things, etc..
SURVEY YOUR ACTUAL CUSTOMERS
Then use the mobile channel as your occasional customer surveys. A couple of times per year, only to a small sample of your total opt-in database, ask them about your next changes to your store. You are considering expanding the X department and shrinking A, B or C, which would your current customers want you to shrink first. Or you are considering adding brands Y, Z and W, which brand would they want you to add to your store shelves, etc..
This is far more powerful than any marketing intelligence you can find in any trade journals or by any wholesalers' marketing materials etc. You get actual factual information from your actual customers. Their exact preferences. Ask for them, not often, in small amounts on a small sample, so never more than once per year per person. But imagine how much more this will increase the loyalty of your customers, if you ask their opinion - and obviously - after you have processed the survey - since you know who was asked - TELL THEM. Not everyone of your customers gets what they asked for. So tell EVERYONE who participated, what was the result. Now they feel they were listened to. Then tell them you'll implement preferences number 1 and 2 (this time..).. Those who voted for number 3 will fully understand - IF you tell them that 1 & 2 got more votes.. Far too often, after a brand asks a consumer for his/her opinion, they don't come back to tell the consumer what was the final tally. Tell your customers what was the final result. They will love you for sharing this.
Customer loyalty and CRM in the age of mobile is radically different from before mobile. It is very early days, but the wonder of mobile is that it is in the pockets of every economically viable person on the planet. If you are a retailer, the only way to talk to every one of your prospective customers is through mobile. This is new, it only became viable a few years ago. Remember, its not an iPhone App or any smartphone app that you want. You want to engage with SMS and a simple mobile web page built on WAP. Thats it. If you want to get creative, you add MMS and Java. That gets you to 80% of all phones of all consumers to the planet. Smartphones will not even reach a tenth of that, so any retailer should not give one penny to any app development of smartphones today. The start is SMS and WAP (and possibly voice and IVR). That is where you start. Then the second stage is MMS or Java (and in CDMA markets like the USA, Korea, Japan, China: Brew). You have to have these deployed before you even listen to someone who is excited about a 'cool' iPhone app for you. You are in retail, that means serving mass market consumers. You are not in the making cool apps business.
NOW IS THE TIME
But retail.. Now is the time to get to understand mobile. This blog had a few simple early examples. Remember, you can go into mobile at three separate stages of your consumer's consumption pattern. You can talk to the consumer before the purchase, advertise to the consumer. You can also talk to the consumer when they are in your store. And you can still engage with the consumer after they have left your store with their purchase. Mobile is the ultimate customer relationship device. Make powerful use if it now, before all of your rivals are doing it, and you will find a competitive advantage out of mobile.
If you want more info, you may want to look into my seventh book, first in ebook format, Tomi Ahonen Pearls Vol 1: Mobile Advertising. It is obviously primarily about the advertising (first stage) part of this opportunity, but that is where most retailers will need to start anyway. My ebook has 50 case studies of mobile marketing excellence the world over, and very highly rated as a practical book of what you can do today.